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The S. Daniel Abraham Centerfor International and Regional Studies

ASPEN INSTITUTE INDIA

The Harold Hartog School ofGovernment and Policy

Rajendra Abhyankar

Chairman,Kunzru Centre for Defence Studies and Research

The Evolution and Future of

India-Israel Relations

Research Paper No. 6

March 2012

PREFACE

Ronie ParciackDept. of East-Asian Studies, Tel Aviv University

From the Romantic to the Historic

Twenty years have passed since the establishment of full-fledged diplomatic relations between India andIsrael. Two decades in which dramatic transformations have occurred in the global balance of power, as wellas with regards to each of the nation-states. India, which was once described by a skeptical newspaper editoras the biggest gamble in history - is nowadays considered to be a miracle. Six decades ago, when Indiaturned from a society subjected to colonial rule into an independent nation-state, soothsayers predictedcatastrophe. The poor economic conditions, the politically unstable environment of the region, the enormousheterogeneity and internal social divides (religious, caste and class, ethnic, linguistic) as well as India'sorientalist and romantic image as a "spiritual" entity with an evanescent grasp of tangible reality evokedprospects of future collapse. A little more than half a century later, these dire warnings have been replacedby reports that India is rapidly becoming a new global superpower. Similarly, Israel, although much smallerin size, was likened to a phoenix, in that its decimated community, scattered throughout the world,rehabilitated and re-established itself after World War II and the trauma of the Holocaust, revived itslanguage, re-created a culture and founded a nation-state granted with an impressive infrastructure, a stableeconomy and sophisticated hi-tech industries. India and Israel exemplify the dynamics of history and socio-political constructs, and testify to rapid and dramatic remodeling of global balance of power within the brieftimeline of just a few generations.

The potential for comparison between the two cultures in fact goes even further: both India and Israelhave set records for religious communities that underwent nationalization processes. In particular both haveto continuously cope with the challenges of cultural identity and the essential connection, in terms ofnationalist thought, between an ancient culture and a new nationhood. In both modern nation-states,national narratives amalgamate a romanticized image of an ancient, noble culture longing to be revived withthe political reality of the here-and-now. This has forced both nations to ponder the inevitable gaps betweenan imagined utopian nation and the inevitable dystopia of day to day living. The product of this discourse isanother feature common to both nation-states: this is the model of religious nationalism operating withintheir democratic rule. Religious nationalism has led to significant social, religious and political difficulties inthe internal sphere – first and foremost, the tense communal relations between the majority populations(Hindu in India, Jewish in Israel) with a significant Muslim minority; these communal tensions clearlyimpact external relations. Communal issues and security concerns are interwoven in India-Israel relations;they strengthen strategic and geo-strategic interests, yet simultaneously engender difficulties stemming fromthe complex structure of internal and external relations of both nation-states.

It is noteworthy that diplomatic relations were established during a period when India's communaltensions were rising and when Israel seemed for a short while to be resolving similar disputes. The Osloagreement and the Peace Treaty signed with Jordan raised hopes for the utopian creation of a "New MiddleEast": an ideal that was crushed following the assassination of Israeli Prime Minister Rabin. In the last fewdecades Israel's status on the international scene has gradually weakened; against this backdrop, Israel'srelations with India seem to have worked toward its own innovative regional alliance. This alliancebypasses, to a certain extent, the Arab world, builds a fresh regional power, and advances a new Asianaffinity.

Such an affinity is not particularly new: Jewish politicians and public figures from the 1930s onwardshave highlighted the longstanding affinity between the two cultures, dating back to the 8th century B.C.E.,and have often expressed concerns that in Indian eyes Jews or Israelis are perceived as Westerners and hencenot Asians. There have been literary pleas addressing Indians – any Indian – to recognize the Asian essenceingrained in the Jewish people in Israel: an ancient, noble and most importantly - shared Asian identity. Theimpact of the romantic European narrative, assigning nobility to ancient civilizations, is definitely presenthere. No less important is the fact that this narrative is closely associated with the romantic notion of India asan exotic locus – a notion that is well known in Europe, and also a part of Israeli lore; ironically, thisperception is also reflected in exotic renderings of the "biblical" land of Israel in Israeli-Zionist consciousness.Roland Barthes wrote that one of the goals of exoticization is to disrobe the Other of history. Two decadesafter the establishment of full-fledged diplomatic ties between India and Israel, the time has come for a directbilateral gaze. The essay of Rajendra Abhyankar, in this publication, the intensive study of India withinIsraeli academic frameworks, as well as the multilayered modes of Indian-Israeli relations today, make it all

the more important to rip aside the exotic and romantic embellishments, restore the historic and toacknowledge the full, tangible presence of history's dynamic moves: here, there and now.

Table of Contents

Executive Summary 10Introduction 11Historical Background 13The First Period ( 1948-1992) 20The Second Period ( 1992-2011) 23Convergences, Divergences 30The Future: 2012 and beyond 38Conclusion 40Bibliography 42Annexe I- Indian Ambassadors to Israel 42Annexe II- Israel Ambassadors to India 42Annexe III- India-Israel Bilateral Trade and Economic 43

Executive Summary

2012 will mark the 20th anniversary of the establishment of full diplomatic relations between India andIsrael. The visit of Indian External Affair Minister Mr. S.M.Krishna to Tel Aviv from January 8 to 11. 2012underlined the importance the two countries attach to this event.

Although the birth pangs of this relationship were painful, it has metaphorically become a strappingyoung lad ready for a great future. This Paper will aim to trace the history of this relationship and forecast itsfuture trajectory. The thesis in the Paper is that besides the changes in the global economic and politicalenvironment after the Cold War, the fact that India’s neighbourhood had become increasingly dangerousdictated that defence and security issues, and indeed supplies, became and remained the fulcrum of therelationship for the decade of the 90’s. It was only in the second decade that the relationship expanded to

include trade, industry, information and hi-tech technology, investment and people-to-people contact.Thus in contrast to the fallow decades since the Independence of the two countries, the last almost 20

years have seen an explosive growth in the diversity of contact between the two countries. By developing anintrinsic worth to the relationship based on the natural talents of the two peoples, its future appears assureddivorced from the ups and downs of their political and security imperatives. An evocative indication thatthe bilateral relationship has sufficiently matured to come out of the closet was the agreement during therecent Krishna visit to Tel Aviv for setting up an Israeli Consulate General in Bengaluru.

India’s small and dwindling Jewish community, one of oldest in the world, has never suffered thepersecution that it has seen round the world. Soon after India’s Independence on 15 August 1947 one of thefirst foreign policy decisions that it confronted was of relations with the recently established State of Israel.Fresh out of the trauma of Partition, India decided to recognise the State of Israel, but only allowed consularrelations on a non-reciprocal basis. From then till 1992 there were sporadic and intermittent attempts tomove the relationship forward. India opened full diplomatic relations with Israel in May 1992 following thecommencement of the Madrid Peace Process.

Introduction

It is well accepted that Jews from Israel reached India’s shores of the Malabar (now the state of Kerala) in 562BCE. They were admitted by the local ruler without conditions attached ‘as long as the world and moonexist’1. Ever since India’s Jewish community has lived and prospered there without any persecution and inthe full freedom.

India became independent on 15 August 1947 and Israel on 14 May 1948. Yet it took them nearly fourdecades to openly start interacting with each other even though their contact through history and culturewould have forecast a much earlier beginning. This year India and Israel celebrate the 20th anniversary ofthe opening of bilateral diplomatic ties. The rapid increase in the scope and diversity of their bilateralrelations in the last two decades looks as if they are furiously making up for lost time.What changed to make this possible?

India and Israel have shared much in common during the last six decades. They share commonbedrock of parliamentary democracy, common law structures, liberal educational systems, knowledge of theEnglish language and a history of British colonialism. India and Israel as functioning democracies havesurvived in a sea of hostility surrounded by implacable adversaries and a heavily militarised securityenvironment. Both nations have fought wars in every decade of their existence. Both countries face externaland internal security threats in the form of terror attacks from radical Islamic groups. At the same time theyare havens of stability in the chaotic region which stretches from North Africa, the Maghreb, to the HinduKush mountain range which has always defined the dangerous region of Afghanistan, Pakistan and Iran.

Today they have a relationship whose fulcrum still remains coopera-tion in defence and space but hasbeen burnished by growing relations in trade and joint ventures in areas of cutting edge technologies likesoftware, communication and information, biotech and nano-technology and alternative energy. In twentyyears their trade has grown exponentially from $ 200 million in 2001 to $ 4.7 billion in 2010 not includingdefence purchases.

In this background, it may be appropriate to pose some questions as we evaluate the past, present andfuture of this relationship.

What is the context of the relationship today? Has it acquired the substance to move the relationshipforward irrespective of geo-political developments?

1 Quoted in Israel Joseph Benjamin, Three years in America 1859-1862 (p.59-60) , published by the Author,1859

The PastHow important was the Islamic factor as an influence on the opening of relations between Israel and India?

How identical is their commitment to the ideals and practice of democracy and secularism?Has there been a difference in the perspective of India’s major national political parties on the question

of Israel?

The PresentIs their relationship transactional and ephemeral or has it developed strong synergies arising from commonchallenges and opportunities?

Have there been other factors which furthered or hindered the flow of their relationship? Did openingof relations strengthen India-US relations?

Do they see each other as valid and preferred interlocutors on international issues? Is India regarded asa trust-worthy intermediary by Israel in the on-going peace process between Israel and Palestine?

How much of convergence of interest is there on issues like fighting terrorism, non-proliferation andIslamic fundamentalism?

Historical Background

The religious dimension

A brief historical background to India’s evolving position on the Israel and Palestinian issue will serve tounderline the importance of the views of India’s large Muslim community with an umbilical connection tothe domestic electoral matrix.

IsraelTwo of the earliest foreign policy decisions that the Government of India faced related to Israel – first, India’sparticipation in the UN Special Committee on Palestine; and second, its recognition as a State and theopening of diplomatic relations.

In 1947, as a member of the United Nations Special Committee on Palestine (UNSCOP), Indiaproposed a minority plan which called for the establishment of a federal Palestine with internal autonomyfor the Jewish population. When the UN General Assembly voted for the majority plan providing for thecreation of two States – Arab and Jewish – in Palestine, India joined the Arab and Islamic countries inopposing the partition of Palestine and proposed a federal state with two autonomous areas2. India alsoopposed Israel’s membership of the UN pointing out that it could not recognize an Israel which had beenachieved through the force of arms and not through negotiations. While reflecting on the events of the time,K.M. Pannikar, Indian diplomat and statesman, who played an important role in shaping the contours ofIndia’s West Asia policy, remarked, ‘on the question of Jewish State in Palestine, however, my sympathieswere not at all with the Zionists. The Indian attitude has always been friendly to the Arabs. Having just comeout of its own partition, India’s dissenting note recommended a single federal state with appropriateautonomy for the two communities while sympathizing with the claims of the Jews….I thought that thisdemand for a State based on religious exclusivism was in the first instance likely to revive Islamic fanaticismand, second, was unjust to the Palestinian Arabs.’3

Coping with the State of IsraelThe establishment of the State of Israel had created a new political reality in West Asia which anindependent India had to confront. To begin with, in response to requests from Israeli officials, India did notwant to recognize Israel as an independent State. Mahatma Gandhi’s position on the issue was quite clear,“My sympathies are with all the Jews….I came to learn much of their age long persecutions. But mysympathy does not blind me to the requirements of justice. The cry for the national home for the Jews doesnot make much appeal for me. The sanction for it is sought in the Bible….Why should they not like otherpeoples of the earth make that country their home where they earn their livelihood? Palestine belongs to theArabs in the same sense that England belongs to the English or France to the French.”4 This was furtheramplified by Jawaharlal Nehru, India’s first Prime Minister. With his anti-imperialist and anti-colonial focus,he wrote the ‘Zionist movement was the child of British imperialism’ and in his famous Glimpses of WorldHistory, he observed ‘the story of Palestine ever since has been one of conflict between Arabs and Jews, withthe British Government siding with one or the other as occasion demanded, but generally supporting theJews’.5

In order to understand the decision on recognition of Israel that India finally made, it is opportune todigress on the churning between the majoritarian (Hindu) and secular/liberal strands taking place at the timewithin India’s polity. The partition of India which created Pakistan - and saw the tragic and bloody exchangeof populations between the two countries - imposed a secular polity in the country which would treat allreligions on an equal footing even though the Hindus were, and remain, in overwhelming majority. This wasthe thinking behind India’s dissenting vote in UNSCOP against the partitioning of Palestine - and theproposal for a single state with autonomous regions for the Arabs and the Jews of Palestine. India was firmlyof the view that the calamity of partition should not be visited on other peoples neither would it engender

2 Sari Nusseibeh, the noted Palestinian scholar,at a conference in 2007 at the Jamia Millia Islamia, New Delhi told me that looking atcurrent developments in Israel and Palestine, particularly the relatively high growth of Israeli Arab population, this solution mayhave merit now. A Palestinian former diplomat Khalid Zamli has been awarded a Ph.D on this theme by the Centre for West AsianStudies,Jamia Millia Islamia, New Delhi.

3 K.M.Pannikar, In Two Chinas: Memoires of a Diplomat’, George Allen and Unwin,London 1955 p.12

4 Shamir Hasan,’ India’s Palestine Policy’ in “India and West Asia: Defining a Role” edited Rajendra. M. Abhyankar, AcademicFoundation, New Delhi 2008

5 Jawaharlal Nehru, Glimpses of World History, Penguin Books,New Delhi 2005, p.763

any hope that UNSCOP’s majority view would lead to a viable and secure Palestine state - as is in fact thecase today. There was a strong push by the Hindu Mahasabha, who claimed to represent those in favour of aHindu state, for the recognition of Israel. The Congress Party having rejected the idea of a Hindu state couldnot bring itself to support a Jewish state. Accordingly, in 1947 India’s Representative to the UN stated thatthe British wanted the establishment of a Jewish State for political and strategic reasons in total disregard ofthe principle of self-determination. On the other hand, the Government was strongly criticised by V.D.(Veer)Savarkar, the spokesman for the Hindu Mahasabha, which propagated a Hindu majoritarian view in Indianpolity, who wrote that “it is… to be regretted that the delegation which represented our HindusthaniGovernment in the UNO should have voted against the creation of the Jewish State. The speeches of ShrimatiVijayalaxmi Pandit, [Nehru’s sister and Indian PR at the UN]in particular were justly ridiculed when shedeclaimed melodramatically that the Indian Government refused to stab the unity and integrity of thePalestine State in the back by carving out a separate Jewish State—forgetting for the while that the veryIndian Government had stabbed the unity and integrity of their own nation only the other day”.6

It needs to be stressed that India’s foreign policy orientation as manifested externally has always beenthe result of jousting between the contending majoritarian and secular views within our polity. To someextent, this contention is reflected in the ideological and electoral platforms of India’s two main politicalformations led by the Indian National Congress and the Bharatiya Janata Party although they are notnecessarily always adversarial on foreign policy issues. This contestation has to be seen in broad terms aspolicy choices at a particular juncture and not in narrow religious or sectarian terms. India remains one ofthe few countries in the world which is not a majoritarian (where the majority community benefits fromconstitutional privileges) democracy; where Hinduism does not benefit from any state assistance.

During the last six decades, in espousing various contentious issues having a bearing on its democraticand secular polity, the majoritarian view has imparted a real-politick edge to an otherwise liberal orientationof India’s foreign policy. It has meant that, as warranted by the changing political and security environmentand the shifting balance between the Great Powers, India has responded in ‘hard’ terms to evolvingsituations. Thus while it was the majoritarian view represented by the Hindu Mahasabha , and its laterideological successors, which remained in favour of opening diplomatic relations with Israel, it was theCongress-led government of Prime Minister Narasimha Rao which took that step in 1992. The shadow-playof these forces has existed from the very beginning in India’s foreign policy decisions even though its overtmanifestation may have often seemed anodyne being weighted in favour of the ‘middle ground’.

This contestation in India is both inter-party and intra-party spanning the political spectrum. Thetendency to look for the ‘middle ground’ is pervasive, particularly on foreign policy issues which areinternally difficult to handle. Internally this contestation gets reflected on a number of issues too many torecount. While successive Indian governments have considered the possibility of having a uniform civilcode, in practice this contestation as manifested in vote banks have ensured that personal law for Hindus,Muslims and Christians has prevailed. Yet another feature of this contestation is that over time votaries ofthe liberal strand have found opportune moments to impart a hard edge to foreign policy taking their cuefrom the majoritarian view: some important foreign policy decisions in the last sixty years which illustratethis anomaly are the policies towards Israel, on nuclear weaponisation, economic liberalisation and relationswith the US.

In the end true to its ethic cited above, India decided to recognize the State of Israel but not open anydiplomatic relations with it. It was only in September 1950, that Prime Minister Nehru agreed to grant thestate of Israel de jure recognition while refusing to establish full diplomatic relations. The decision torecognize the state of Israel emerged from the consideration that ‘continuing non-recognition is not onlyinconsistent with the overall relationship but even limits the effectiveness of Government of India’s role as apossible intermediary between Israel and Arab States’.7 Yet Nehru would not go beyond. He explained thus:‘We propose to take no action in this matter at present. India can play no effective part in this conflict at thepresent stage either diplomatically or otherwise.’8

Nevertheless, in March 1952 Prime Minister Nehru made a commitment to open relations to Walter

6 Reproduced in ‘ Historic Quotes” of Veer Savarkar http://www.docstoc.com/docs/8423379/Historic-Statements-Veer Savarkar

7 K.P. Mishra, India’s Policy of Recognition of States and Governments, American Journal Of International Law, Vol 55,No.2 Apr 1961,

8 Quoted in G. Parthasarathy (ed) Jawaharlal Nehru, Letters to Chief Ministers 1947-64, Volume 1, OUP, London, 1985, p.128.

Eytan, senior Israeli diplomat, when he visited Delhi.9 It is believed that Maulana Abul Kalam Azad, Nehru’sMinister for Culture and unofficial Adviser on Arab and Muslim issues, prevailed on him to delay theproposed step as it would be misread by the Muslim community still to get over the trauma of partition, andnegatively affect Arab support on the Kashmir issue. While there was truth in the former contention, thelatter has always remained problematic.

Here again Savarkar had this to say, “I am glad to note that the overwhelming majority of the leadingnations in the world should have recognised the claim of the Jewish People to establish an IndependentJewish state…. After centuries of sufferings, sacrifices and struggle the Jews will soon recover their nationalHome in Palestine which has undoubtedly been their Fatherland and Holy land… Pandit Nehru made hiscase more untenable by stating that the creation of the Jewish State was opposed by his Government tosecure the goodwill of the group of …Moslem States in Asia.......

The creation of a strong and independent Jewish state must serve to checkmate the aggressivetendencies of Moslem fanaticism in general. The Jewish people bear no political ill-will towardsHindudom…. Hindu Sanghatanists at any rate cherish goodwill towards and extend their moral support tothe establishment of the independent Jewish State in Palestine on moral as well as politicalgrounds...”.Strong sentiments based on his views of a Hindu majoritarian polity in India.

By according formal recognition to Israel, ‘India acknowledged Israel’s right to exist….recognized thedesirability of solving the Arab-Israeli dispute without resort to threats of annihilation and provocations bythe Arabs, but India also expressed its disapproval of Israeli military retaliations and Israel’s appropriationsof additional Arab territory and its alteration of the flow of River Jordan’s water.’ At the same time, Nehru,somewhat facilely, also opined that the policy on Israel was ‘not a matter of high principle, but it is based onhow we could best serve and be helpful in that area.’ The desire for India to play a role in the Arab-Israelidispute was clearly upper-most in Nehru’s mind. Whether India can, or should, play such a role remainsmoot even today.

It will be seen from the foregoing that the issue of Israel’s recognition brought into open the strongdiscord between two views of an emerging India: Mahatma Gandhi and Jawaharlal Nehru’s secular viewwhich gave equal respect to all religions and no privileges to Hinduism; and V.D Savarkar’s view of a Hindunation and polity. India’s decision was the result of the inter-play of strong sentiments represented by thetwo opposing ideologies. The considerations laid out by Maulana Azad buttressed the case for a seculardemocratic polity which would give equal voice to the huge number of Muslims who stayed behind in Indiaat Partition. The Indian National Congress’ decision to establish a secular democratic polity in India,rejecting a majoritarian Hindu polity, as the only guarantee of its survival as a nation, left no room forconsidering full relations with Israel. True to its pursuit of ‘the middle ground’ in foreign policy thegovernment decided to recognise the State of Israel but not its government which the opening of diplomaticrelations would have implied. Similarly, it decided to open consular relations, yet not reciprocally, in order tofacilitate the emigration of the Indian Jewish community to Israel. India still remains the only non-majoritarian democracy in South Asia.

The Palestinian IssueThe Palestinian question has engaged Indian leaders since the national movement. It was Mahatma Gandhiwho in the early 1920s first spoke of Indian support to the Palestinian cause which after Independencetranslated itself into the staunch support that India gave to the PLO and to the creation of Palestinian State.India and West Asian countries have had a history of struggle against colonialism. Despite a lack of a jointstruggle against foreign domination, India’s principled opposition to imperialism and leadership of the Non-aligned Movement was greatly appreciated in the region and strengthened its historical ties with the Arabcountries. This support went back to 1936 when the Congress Working Committee sent its greetings to thePalestinian Arabs and observed September 27, 1936 as Palestine Day in order to show their solidarity withthe Palestinian people.10 Consequently, one of the cardinal points of the Non-aligned Movement founded byNehru, Nasser and Tito was the support for an independent Palestinian State. India was the first country to

9 P.R.Krishnaswamy, ‘India’s Israel Policy’, Columbia University press/ Magnum Books, New Delhi 2010

10 Krisnaswamy, ibid

recognize Yasser Arafat as the President of the Palestinian State in 1980. India’s support to the Palestinianshas been total and it mattered greatly in bringing the entire membership of the Non-aligned Movement tofocus on the Palestinian issue.

Indian position on the Palestinian issue has not changed greatly since the 1980s. K.K. Tiwari, the IndianMinister of State for External Affairs, observed in 1988 that ‘the fundamental issues involved in the peaceprocess were the attaining by the Palestinian people of their inalienable right to self-determination and therecognition that all States in the region, including the States of Palestine and Israel and other neighbours,have the right to live in peace and security within internationally recognized borders.’ In December 1991,India also voted in favour of UNGA Resolution 46/86 which rescinded its November 1975 Resolutionequating Zionism with racism, which India had voted in favour of at the time. India voted in favour ofUNGA Resolution No. 52/250 of 7 July 1998 conferring upon Palestine, in its capacity as Observer, additionalrights and privileges of participation in the sessions and work of the General Assembly and the internationalconferences convened under the auspices of the UNGA or other organizations of the UN. In the wake ofestablishment of the Palestinian National Authority (PNA), India opened its Representative Office in Gazaon 25 June 1996 to ensure effective coordination with the PNA. That Office was shifted to Ramallah in 2002after Yasser Arafat shifted his base there. India has extended its consistent and unwavering support on thePalestinian issue.

India has supported the Middle East Peace Process (MEPP) from its beginning in 1991 and was part ofthe defunct multilateral track of the MEPP. When it was in operation, India participated in the meetings ofthe four Working Groups on regional economic development, arms control and regional security andenvironment and water resources. India has voiced concern at various times at the stalling of the MEPPmaintaining that the momentum of the Declaration of Principles and Oslo Accords in 1993 has not beenmaintained. India welcomed the Wye River Memorandum signed between Israel and PLO on 23 October1998. India also welcomed the Sharm-el-Sheik Agreement between Israel and PLO concluded on September19, 1999. India’s participation at the Annapolis Meeting opened a door to the possibility of a role for India inthe renewed peace process under the last Republican Administration. It seems unlikely that it will resume inthis election year in the US.

The Palestinian issue impinges directly on Indo-Israeli relations. The Palestinian cause remains popularin India. The sentiments of its substantial Muslim populace which regards Israel’s policy towards thePalestinians as totally unjustifiable cannot be ignored. It is also a part of the internal electoral matrix. Indiashares the perception that the question of Palestine is at the core of the Arab-Israeli conflict. India’soverarching position supports the legitimate right of the Palestinian people to a State and the imperativeneed for a just, comprehensive and lasting peace in the region based on UNSC Resolutions 242 and 338 andthe principle of ‘land for peace’.

India continues its moral, material and technical support to the Palestinian people. It has pledgedfunds for construction of a library-cum-activity Centre at the Palestinian Technical College in Deir-al Balahand one at the Al-Azhar University in Gaza. It has also welcomed Palestinian students under the ICCRscholarship programmes as well as provided specialized training in security to Palestinian officers. Indiavoted in favour of Palestine’s recent application for membership of the UNESCO.

Evolution of Relations with IsraelThe political and geo-strategic ethos, briefly described above, which guided India’s policy on Israel,immediately prior to and after, Indian Independence sets the stage for us to view the evolution of bilateralrelations between India and Israel. It would be appropriate to divide the period into three periods:1948-1992- from the Independence of Israel to the opening of full diplomatic relations;1992-2011- the first 20 years;2012 and beyond

The First Period (1948-1992)

India recognised the State of Israel on 18 September 1950. It was a time when under Jawaharlal Nehru,India’s first Prime Minister and the architect of India’s foreign policy, India was carving out for itself a role asthe champion of anti-imperialism and anti-colonialism. It had made the Palestine issue the fulcrum of itsleadership of the growing Nonaligned movement. As such during these decades India’s nonaligned policydictated its stance towards Israel. Furthermore, the fact that the Soviet Union, which also did not havediplomatic relations with Israel, was seen as ‘the natural ally of NAM’ while at the same time becomingIndia’s largest defence partner also had a telling effect. It would appear that the prime mover on the Indianside was the possibility of getting military material whereas from Israel’s side it was to keep testing thewaters for a fuller engagement. Over-all, India continued to look with suspicion on Israel’s relations with itsneighbours like China and Sri Lanka. China’s acquisition of Israeli hi-tech military equipment was ofstrategic concern to India and it kept a close eye on the warming Chinese-Israeli relations since the1980s.Similarly, the India-Sri Lanka Agreement of 1987, which followed on the ethnic crisis of 1983,specifically excludes Sri Lanka’s relations with foreign powers, aimed at the US and Israel. The over-archingpresence of governments run by the Indian National Congress both at the Centre and in the states made forconsistency of both rhetoric and practice on the Palestine-Israeli issue.

The Congress party establishment continued to insist on a national consensus in foreign policy -support for the Palestinians and opposition to Israel were part of the progressive orientation of the rulingCongress party. The pro-Arab foreign policy not only became a party consensus but also became an integralpart of the Congress party ethos.11This remained true notwithstanding the absence of reciprocity by the Araband Islamic countries on Kashmir or on condemning cross-border infiltration from Pakistan. India’s earlyattitude to Israel had harmonized with Cold War politics, and Israel’s identification with the West hadprovided an ideological basis for India’s pro-Arab orientation: the Arab League and the Palestine LiberationOrganization (PLO) were observers in NAM. Since Israel’s exclusion from the Bandung conference, NAMhad emerged as the principal forum seeking Israel’s international isolation.12 India had played a leading roleat the United Nations since its Independence. As an active member of various UN forums India participatedin some UN peacekeeping mission worldwide; one of these was active along the Egypt - Israel border beforethe Six Days War.

Equally important were considerations of domestic Muslim opinion and the importance of the Arabfactor in India’s relations with West Asia. From the mid-1980s the ruling Congress party's attempts to useboth Hindu and Muslim formations to win political loyalty merely served to divide Indian society. Theinability of the Congress party leadership to take a decisive stance against communal forces lost it thesupport of many minority voters in the 1989s elections, particularly the Muslims. In 1989 Rajiv Gandhi’sgovernment, in the celebrated Shah Bano case, on the question of the primacy of common law over Muslimlaw, dithered between its fear of offending the Hindus and its fear of losing the Muslim vote. The result wasa political impasse in which the Hindu parties took the initiative. India’s large Muslim community and theirinterest in developments in West Asia, regularly articulated through the Urdu media on the Arab-Israeliissue, has always been influential in determining the policy towards Israel. The occasional street protests atnegative anti-Palestine developments have been seen as influencing vote-banks of major national politicalparties, the Congress or the BJP. Hence the risk averse policies of either party when in government oropposition.

Yet these were not entirely fallow years in terms of contact between India and Israel. It is reported thatIndia purchased a quantity of arms and ammunition from Israel both after the Sino-Indian War of 1962 andthe India-Pakistan Wars of 1965 and 1971. India found that Israel was ready to sell the needed weaponswhich were otherwise unavailable due to embargos by UK, US and France. Similarly after the assassinationof Indira Gandhi and the formation of the National Security Guard there are unconfirmed reports that Israelitraining was availed of. In addition, a relationship between India’s security agency, Research and Analysis

11 Itzak Gerberg, ‘India-Israel Relations, Strategic Interests, Politics and Diplomatic Pragmatism’, Israel National Defense College TelAviv,2010

12 Itzak Gerberg, ibid

Wing (RAW) and the Israeli Mossad has existed since the 1960’s. Even on the non-defence and security frontalso the situation was not entirely negative. There were contacts to understand Israeli techniques of dry landfarming and drip irrigation (which reached Israel from Kerala through Indian Jewish immigrants). India alsoinitiated a few direct and indirect contacts with Israel mainly in the field of technology in the late 1980s.

The greatest success has been in the diamond industry which today accounts for 50 percent of India-Israel non-defence trade. India’s prolific diamond industry is remarkable in that its prime movers come fromPalanpur, a small village in Gujarat. In the inter-War years this community, who follow the Jain religion, setup trading companies in Antwerp where they came in touch with Jewish diamond traders who dominatedthe business then. The good relations between the Indian and Jewish communities in Antwerp and NewYork over the decades, as well as the facilities for cutting of and trading in diamonds has led the former toestablish companies in Tel Aviv. It is reported that one out of every six diamonds in the world is cut byIndian diamond manufacturers In terms of diplomatic contact India allowed the appointment of a TradeCommissioner of Israel for Southeast Asia, including India, based in Mumbai. Following Nehru’sreservations that India was not part of SE Asia the designation was changed to Consular Agent, andeventually upgraded to Honorary Consul in October 1952 and finally to Consul in June 1953. In 1989 theconsular jurisdiction was extended from Maharashtra to Kerala.13India allowed this non-reciprocally withoutestablishing a post in Israel.

During these years a few high level, yet fruitless, contacts between the two countries did take place.The important being visits of Foreign Minister Moshe Sharett (1956) in the middle of the Suez crisis; RuthDayan, wife of Defence Minister Moshe Dayan (1968) and Foreign Minister Moshe Dayan (1977).

This situation continued till 1989 when three developments sowed the seeds of change: first, thebeginning of the era of coalition politics in India; second, the beginning of Pakistan-sponsored insurgency inKashmir; and finally, break-up of the Soviet Union and end of the Cold War coupled with the fall-out fromthe reversal of Iraq’s invasion of Kuwait.

The Second Period (1992-2011)

The twenty years after the opening of full diplomatic relation have seen an uncommonly phenomenalgrowth and diversity in the relations between India and Israel. It is rare to find this level of speed in themovement of relations between any two countries without the expected ups and downs which are a normal

13 Krishnaswamy ,ibid pp 130

feature. This would imply that notwithstanding the momentous international developments during theperiod India Israel relations were set on a steady course and may have benefitted from them. This growthwas due to Israeli persistence in spreading themselves over as many sectors as possible coupled with India’sacquiescence with this level of penetration.

With the change in the international balance of power after the 1991 Gulf War and the disintegration ofthe Soviet Union, India and Israel finally found the opportunity to normalize their relations. There werevarious factors that played a significant role in this regard. As stated above, there were two domestic and oneexternal cause which led to this change.

The beginning of the coalition era in Indian politics, particularly at the Centre (the federal level)meant that unlike hitherto every national level political party, and even some regional ones, had had achance to be part of the successive governments and dictate policy. Often at variance with their positionswhen in Opposition, none of them were inclined to change the policy on Israel. Admittedly there werechanges of nuance depending on whether the Congress or BJP were leading the coalition yet the broad linesdid not change. This was primarily because the defence relationship with Israel got entangled withgovernment’s primary responsibility - to assure the security of one billion Indians.

In the early 1990s, the growing insurgent activity in Kashmir sponsored by Pakistan worsened thedomestic and the regional security environment of India. OIC (Organisation of Islamic Conference)Resolutions on Kashmir consistently criticising India, at Pakistan’s behest, on the Kashmir issue and on theMuslim community in India, were in stark contrast to Israel’s support on Kashmir. The backing whichPakistan received in the OIC from Saudi Arabia and the reluctance of other member-states, all maintaininggood relation with India, to express their reservations on OIC’s anti-India tirades was a disappointment forIndia. Expectedly, some saw a common cause with Israel. The main opposition party BJP kept the pressureon the Government to normalize relations with Israel. These internal developments took place in the midstof the country’s precarious financial situation which required the government to sell its gold reserves to theWorld Bank to maintain solvency. It triggered the policy for economic reform and liberalisation which sawIndia dismantling the effete socialistic pattern of economic governance. In many ways the liberalisation ofthe system was also a liberalisation of the mind. It provoked the country to think of alternatives in thechanged international political and economic circumstances. The domestic factors were greatly assisted bythe major changes in the international political order to change India’s thinking on Israel. The end of the coldwar and other events during that time compelled India to take a renewed look at the region. SaddamHussein’s invasion of Kuwait and its reversal by the US-led Coalition, which included some Arab countries,was instrumental in setting off efforts for a peace process between the Arabs and Israel. Painstakingdiplomacy by Secretary Baker led to the launching of the Middle East Peace Process in Madrid in 1992.14Itwas a diplomatic engagement in which many countries wished to participate; predicated on their havingdiplomatic relations with both the parties. While the Soviet Union showed positive indications that it wouldrecognize Israel, the US started talking to the PLO. China opened diplomatic relations with Israel in January1991. Eventually, the PLO itself in its Conference in Algiers in 1998 recognized Israel’s right to exist and thepossibility of a peaceful solution to the Palestinian-Israeli conflict. For India, after the Madrid process began,the argument of annoying friendly Arab States, and Muslims at home lost relevance. India too was equallyinterested in joining a historic process having the potential to alter the political dynamics of the region.

India opened full diplomatic relations with Israel in January 1992 and opened its Embassy in Tel Avivin May 1992. In justifying the opening of relations India gave a number of reasons:Israel’s criticality to what happens in West Asia and the Gulf, a part of India’s extended neighbourhood

impacting its strategic space, energy supplies and 6 million Indians living in the area;Sophisticated defence equipment, technologies and systems from Israel given the drying up and unreliability

of ex-Soviet sources;potential of co-operation in defence modernisation and production;Israel’s knowledge and experience in countering terrorism; Israel’s border management and counter –

terrorism techniques could help India in getting over its major weaknesses in internal securitymanagement;

Absence of any quid pro quo from the Arab states;

14 Eugene Rogan, ‘The Arabs’, The Perseus Group,London, 2010

Israel’s prowess in agriculture and its technologies;In announcing opening of relations with Israel India made progress in bilateral relations contingent on

progress in the Middle East Peace Process primarily to mollify the Arab countries who remained firmlyopposed to Israel. It stated that India’s relations would grow in tandem with the forward movement in thedialogue. Although this policy continued even after the Oslo Accord had broken down, rapid progress inIndia-Israel relations made the proposition redundant. The two had got disconnected for reasons ofpragmatism and self-interest. India also took a less strident position against Israel in the UN forums much tothe chagrin of the Palestinians and made considerable attempts to moderate anti-Israeli resolutions at theNAM meetings in Durban and elsewhere.

With the establishment of formal diplomatic relations with Israel, there were many rounds of talks andexchanges on military and defence related matters. Despite this level of cooperation, India hesitated to buyweapons from Israel. It was during the Kargil crisis (1999), when Israel responded positively to Indianrequests for military equipment and ammunition, in the face of US pressure to implement an arms embargoon India that this reluctance abated.. It opened a new chapter in the arms trade between the two countries.India is today Israel’s largest arms market while Israel is India’s biggest arms supplier. India and Israel havealso cooperated in the field of satellite and space technologies; there is no nuclear cooperation between them.

The following is a list of major bilateral agreements entered by them:

Bilateral agreements AgreementDate

Establishment of Full Bilateral Diplomatic Relations 29.01.1992

Agreement for the Promotion and Protection ofInvestments

29.01.1996

Convention for the Avoidance of Double Taxation and forthe Prevention of Fiscal Evasion with Respect to Taxes onIncome and on Capital

29.01.1996

Bilateral Agreement regarding Mutual Assistance andCooperation in Customs matters

29.01.1996

Agreement on Cooperation in Peace Uses of Outer Space 28.10.2002

Agreement on Cooperation in the field of Health andMedicine

09.09.2003

Agreement on Cooperation in combating illicit traffickingand abuse of narcotic drugs and psychotropic substances

09.09.2003

Agreement on Cooperation in the field of Protection of theEnvironment

09.09.2003

Agreement on Exemption of Visa requirement for holdersof diplomatic, official and service passports

09.09.2003

Memorandum of Understanding on India-Israeli Researchand Development Fund Initiative

30.05.2005

Inter Governmental Work Plan on Agriculture Cooperation 10.05.2006

In addition to the above, proposal for a Free Trade Agreement is on the canvas even though thenegotiations will not be easy: issues relating to Israeli IPR regime, the job- creation aspect of the FTA and thefact that India is also negotiating an FTA with the GCC will have to be taken into account. While there have

been discussions on Mutual Assistance Treaties on Criminal matters, during the visit of External AffairsMinister Mr. S.M. Krishna to Tel Aviv in January 2012 an Extradition Treaty was signed. Since 2001 India andIsrael have regular meetings of the Counter-Terrorism Group which is part of their Strategic Dialogue.

As stated above, this period was extremely productive politically, militarily and economically for thebilateral relationship.

DefenceThe ballast for Indo-Israeli bilateral ties is provided by their defence cooperation. The Israeli model ofmoving towards technological independence in military production has considerable appeal for India.Moreover, with Israel specializing in upgrading Russian equipment; it has emerged as an alternative sourcefor procurement of hi-tech defence systems. For Israel, Indian military’s acquisitions have meant access to alarge and financially rewarding arms market.

From anti-missile systems to hi-tech radars, from sky drones to night-vision equipment, Indo-Israelidefence cooperation has known no bounds in recent times. A large part of the imported equipment tomodernize the Indian Army battalions as part of the Rs. 3, 290 crores (over $700 million) investment is alsolikely to come from Israel. Israel is also to figure in the Indian Army's plan to bolster its lethal firepower,anti-IED (improvised explosive devise), and communication capabilities. Israel's defence industry wasbidding for the upgrade of the Indian Air Force's Mig-27 strike aircraft, the avionics upgrade of the IndianNavy's Ka-25 anti-submarine helicopters and maritime patrol aircraft. Israel's Soltam 155mm Howitzers areone of three contenders for the Rs. 5000 crores (over $1 billion) deal to purchase about 1,000 Howitzer guns--evaluations of which are currently being conducted by the Indian Army. Israel and India are also involved inclose cooperation in upgrading Russian-supplied Mig-21 Bison aircraft and T-72 tanks, particularly to makethe tanks capable of conducting night operations.

India has also shown its interest in acquiring unmanned aerial vehicles, with negotiations ongoing forthe joint production of high altitude Herons with Israel. The Indian Air Force is also looking to acquire theIsraeli Harpy missile, used for silencing enemy radars, which would be a significant force multiplier. Someother acquisitions from Israel in which the Indian Air Force has recently expressed a keen interest includeDelilah II bombs, crystal maze bombs, Pechora III, surface-to-air missiles, and Popeye beyond-visual-rangeair-to-air missiles. Israel has commenced delivery of Phalcon Airborne Warning & Controlling Systems(AWACS). India's AWACS project involves the integration of the "Phalcon" radar and communication systemwith the Russian Ilyushin-76 heavy transport military aircraft.

India and Israel are also currently negotiating the possible sale of the Arrow-II anti-ballistic missiledefence system to India to strengthen its air defence capabilities. Though Israel is more than willing to sellthe system, it needs American approval since the U.S. was a collaborator in the project. India has alreadyacquired the advanced "Green Pine" fire control radars from Israel. This is transportable phased-array radarwhich forms a crucial component of the Arrow system and can detect and track incoming missiles from upto 500km away.

EconomicThe two countries have established a web of long-term economic partnerships cutting across key andstrategic business sectors.15India is the second largest export market for Israel and Israel the seventh largestpartner for India. Bilateral trade volume has scaled US $ 4.7 billion (not including defence sales) althoughheavily weighted in favour of diamonds. The bilateral partnership would draw strength from superior R &D and innovation capabilities of industries and institutions in Israel and the large untapped market in India.Innovations and cutting-edge solutions developed in Israeli R & D institutions could be effectivelycommercialized in the large Indian market. Sector-wise, life sciences, medical devices, biotechnology,nanotechnology, clean tech, alternative energy, water management and education and training were areas

15 Confederation of Indian Industry ‘The Third India-Israel Forum, New Delhi, 1-2 November 2010, Proceedings’,Confederation of IndianIndustry, New Delhi, 2010

that are primed for deep bilateral business cooperation. Last year, Israeli companies invested over $3 billionin India, in sectors ranging from dairy farming to real estate to hospitals. Both countries have already signedfive significant trade and economic agreements from 1993 to 1996, while bilateral trade grew from $80million in 1991 to $4 billion in 2008. Furthermore, R & D collaborations in security solutions, foods andagriculture hold much promise. Israel has a close relationship with India on water management and othergreen initiatives, particularly agricultural. The Tel Aviv-based company Netafim, which provides irrigationsolutions for agriculture and landscaping, has put more than 14,800 acres of land in Andhra Pradesh, knownas the 'Rice Bowl of India', under sprinkler and drip irrigation.The India-Israel Forum meeting in New Delhi in November 2010 proposed a three-tiered agenda16:

Business(B2B) partnerships to develop solutions that are ‘made in India, made for India’,Government(G2G) engagements ( state to state) to absorb market risks,Academia (a2a) partnerships with distinct roles for each side. It would involve universities on both sides.

From the foregoing it is evident that increasingly India Israel relations have got free from the burden oftheir political histories allowing the trade and business sectors the possibility of evaluating opportunitiesmainly on commercial terms. This could be seen as a sign of the increasing stability of the relationship.

People-to-PeopleThe long Jewish presence in India free of anti-Semitism and the presence of 70,000 Indian Jews in Israel havefurther catalysed the relationship. One indication of this bond can be gleaned from an international opinionsurvey in 2009 conducted on behalf of the Israeli Foreign Ministry, which states that India is the most pro-Israeli country in the world.17 A new initiative has been launched to reach out to Indian policymakers,journalists and the public to spread awareness about Israel and help strengthen ties with India, especially inthe fields of trade, tourism and technology. The Israel Project (TIP), a non-profit educational organisationthat provides information about Israel and the Middle East to the media, policymakers and the public, haslaunched the innovative programme in India to strengthen relations between the two countries. Theprogramme is already reaching out to over 2,000 journalists and leaders in India. The purpose is to get themthe facts and sources they need to understand the region and strengthen relations between India and Israel.

India topped the list of tourists from Eastern countries to Israel in 2010, with over 40,000 visitors. Thefigure was up 75 percent compared to the previous year, displacing South Korea from the top slot afterseveral years, according to Israeli official data. With the successful campaign last year, the Israeli tourismministry now aims to attract at least 50,000 Indian visitors in 2011 and also plans to participate for the firsttime at the International Tourism fair in Mumbai.

India is known in Israel as an ancient nation with strong cultural traditions, and in popular Israeliperception India is an attractive, alternate tourist destination, particularly among the youth. India is adestination of choice for over 35,000 Israelis, mostly youth, after finishing military service, visit Indiaannually. Essentially back-packer tourists, they congregate at particular spots like Goa, Manali andDharamsala, often the attraction being an easy supply of illegal drugs. Nevertheless there is abiding interestin India culture, dance, music and traditional crafts. The Indian Embassy organized in May 2011 a successfulmonth long cultural festival in Israel. The agreement to open an Israeli Consulate General in Bengaluru(Bangalore) during the visit of the Indian External Affairs Minister to Tel Aviv in January 2012 will intensifythese contacts both at the popular and business levels.

High Level ContactsThis period saw the beginning of regular, high level interaction between the two countries. Israeli President,Ezer Weizmann, visited India in 1996 and Prime Minister Ariel Sharon visited in 2003. Conscious of Arab

16 India Israel Forum, ibid

17 Quoted in Ynetnews 4/3/09-as part of the Branding Israel project ‘Israel Foreign Ministry, Tel Aviv 2009. 13 countries were surveyedincluding US, China, Canada, UK, France and Russia. Of the Indians surveyed 56 % expressed the greatest level of sympathytowards Israel in India.

sentiments, India has been cautious in regards to the frequency and level of state visits. Among the highestlevel visitors travelling to Israel were India’s External Affairs Minister, Jaswant Singh, and Deputy PrimeMinister Advani, in 2000 and External Affairs Minister S.M.Krishna from January 8 to 11, 2012. This visitcame after 12 years and the first by a cabinet minister in a Congress-led government.

From Israel, the ministerial visits were by Minister of Agriculture and Rural Development ShalomSimhon (Jan 2008),Minister of Trade, Industry and Labor Binyamin Ben Elizer(Jan 2010),Minister ofAgriculture Orit Noked(May 2011) and Minister of Tourism Stas MIsezhnikov(Sept 2011).From India,Minister for Science and Technology, Kapil Sibal, and Minister of Commerce and Industry, KamalNath,(2005), and Agriculture Minister, Sharad Pawar,(2008),Chief Ministers of Punjab and of HimachalPradesh (Nov 2009) and of Haryana (Apr 2011), and Ministers of State for Commerce and IndustryJyotiraditya Scindia(Feb 2010),Science and Technology Prithviraj Chavan (Mar 2010) and for IT andCommunications Sachin Pilot (June 2011). There have been other, lower level ministerial visits from bothsides during the last two decades.

Convergences, divergences

In the light of the foregoing it will useful to isolate the areas of convergence and of divergence between Indiaand Israel. Despite a growing convergence of interests between India and Israel on a host of issues, thereremain a number of constraints to their bilateral relationship. It is often seen that in an overall climate ofconvergence there are embedded divergences between the two countries.

Palestine-IsraelThe bilateral relationship will continue to face impediments arising from political developments in theMiddle East and their impact in India. The outbreak of the Al-Aqsa intifada in September 2002 , the Israel-Hezbollah war and other recent developments have given strength to India’s earlier positions on fullestsupport to Palestine and a distance from Israel.

This issue came to the fore during the visit of Prime Minister Sharon to India in 2003. It focused on thedifferences in nuance on India’s West Asia policy between the right-wing Hindu-dominated BJP-led NDAGovernment and the Congress. Although Prime Minister Sharon met the then Leader of Opposition SoniaGandhi, it did not receive much coverage in the Indian media. When the Congress-led UPA Governmentcame to power in July 2004, they took a strongly pro-Palestinian position in their common platform.Although relations with Israel have continued to grow, particularly in the defence area, India has maintaineda distance at the political level from Israel. Mahmud Abbas has always been welcomed in India, the last timein October 2008. While India welcomed Israel’s unilateral withdrawal and disengagement from Gaza in 2005it saw this as only one step towards a Palestinian state. In late 2008 – early 2009 India made five statementscritical of Israeli action against the people of Gaza. Speaking at the Palestine Solidarity day in January 2011 inNew Delhi the Indian Minister of State for External Affairs stated that

“..We believe the West Asian region is of vital importance to India with more than 4.5 million Indiansmaking it their home. The region is also an important source of energy for India. India wishes to see thecreation of an environment for the earliest possible resumption of dialogue. We share the perception that theconflict in West Asia is essentially political in nature and cannot be resolved by force. In line with oursupport for United Nations Security Council Resolutions 242 and 338, India supports a negotiated solutionresulting in a sovereign, independent, viable and united State of Palestine living within secure andrecognized borders with East Jerusalem as its Capital, side by side and at peace with Israel as endorsed inthe Quartet Roadmap and United Nations Security Council Resolutions 1397 & 1515.

India has supported the Arab Peace Plan, which calls for withdrawal of Israel to pre-1967 borders,along with recognition of Israel and the establishment of the State of Palestine with East Jerusalem as itscapital. India has called for an end to Israeli settlements in the occupied Palestinian territories and for an

early and significant easing of restrictions on the free movement of persons and goods within Palestine.India had welcomed the ‘direct talks’ between Israel and Palestine. The continued stalemate in the situationand hardening of positions is a matter of concern. We hope that the talks would be resumed leading to finalresolution of the conflict. As a responsible member of the international community and as a country withlong-established ties with West Asia, India desires to see a peaceful resolution to tensions in the regionthrough peaceful dialogue.”18

India’s public posture relating to the Palestine issue is unlikely to change, even more so, in the contextof the present developments in the region. In the background of current upheavals against establishedregimes in Tunisia, Egypt, Yemen, Bahrain, Jordan and Syria it remains moot whether the Palestinian issuewill return foreground. The major Arab countries have not made India’s growing relations with Israel anissue even though press opinion in these countries keeps the issue in focus. Yet the election of Islamicoriented parties to governments in Tunisia, Morocco and Egypt may change their status quo-ist policies onIsrael and by implication their view of India-Israel relations.

An important reason for the waning of rhetoric on India’s relations with Israel in West Asia has beenIndia’s consistent economic success in the last decade. Saudi Arabia and other countries in the Gulf havebeen actively seeking political and economic ties with India. The Saudi King’s visit to New Delhi in January2006 opened the door for other Gulf leaders to visit India. This trend has becoming a reinforcing one. Indiahas itself also been seeking close economic ties with the Gulf countries and negotiations for an FTA with theGulf Cooperation Council (GCC) are in progress.

Due to its longstanding political relations, the large Muslim community in India, geographic proximity,dependence on petroleum resources and labour migration to the region, it is unlikely that India willabandon its close ties with the Arab world, even as it deepens its relations with Israel. Even the Palestinianleadership, President Mahmud Abbas, has argued that its ties with the Jewish State should enable India toplay a more active role in the region. It was at the insistence of President Mahmud Abbas that India wasinvited as a full participant to the US sponsored 2007 Annapolis Conference.

The divisions that came up during the later years of President Arafat where he was losing support bothfrom the principal Arab States and from within the Palestinian population also placed India in a difficultposition. The resurgence of Hamas and its eventually forming the Government in the PNA has meant adramatic change in the dynamics of the Israeli-Palestinian issue. The division of Palestine itself - between theHamas led Gaza Administration and the Mahmud Abbas led Palestine Authority in Ramallah has not beenhelpful. Gaza remains under Israeli siege and there is no headway to meeting the concerns of Hamas. Indiahas excellent relations with the PA and maintains regular contact with Hamas in Gaza. The non-recognitionof the Hamas Government by the US and Israel has led to an impasse in further progress on the goal ofcreating two States living within secure borders. The national unity government agreed by the PLO andHamas in the wake of the Arab awakening promises a unified approach to the issue of negotiating withIsrael- if only the latter would see it in this light.

India and the Middle East Peace ProcessDespite having vital political, economic and cultural interests in West Asia, India is still not seen as a playerin the Peace Process. India’s role in the MEPP was confined only to the multilateral track since in 1991 it didnot have diplomatic relations with Israel. On the other hand, China which had a much lower profile in WestAsia at the time was given Observer status largely due to its permanent membership of the Security Council.When the Quartet process was unveiled, once again India’s role was not recognized, although Chinaremained an Observer and had by then considerably increased its profile in the region. While there was adegree of ambivalence on India’s part on whether or not to participate and increase India’s profile in thePeace Process (largely due to the apprehension that its quid pro quo could provoke activism on Kashmir bythe countries in the region), on the side of the Palestinians there was nothing more than lip service to seekingIndia’s active role in the Peace Process. On the other hand, neither did Israel propose India for a role in theQuartet process. It appeared that while the Palestinians were paying lip service to continue the widespreadsupport it had amongst the Indian public, the Israelis were talking of India’s role only in order to advance its

18 Statement of Mr E. Aahamed, Minister of state for External Affairs on the occasion of Palestine Solidarity Day January 2011,Ministryof External Affairs web-site: www.//mea.gov.in

own interests in India. India was invited as a full participant for the first time in 2007 at the AnaheimConference. It was understood that Mahmud Abbas has spoken strongly in favour of it to the US. Yet on thewhole the Palestinian issue has become emotive from time to time due to the exploiting of the Muslimsentiment in the country without any corresponding benefits, in foreign policy terms, for India. On the otherhand, the changed situation in the region particularly the Persian Gulf has helped to ensure that support onPalestine is no longer seen as a touchstone for bilateral, political and economic relations. India has continuedits policy not to sponsor anti-Israeli resolutions and to seek to tone down nonaligned resolutions.

Defence CollaborationAs stated above this is an area of prime convergence between the two countries. India’s burgeoning ties withIsrael, particularly in defence exchanges, are based on mutual benefit and cannot be wished away. As wehave seen there may be a change of rhetoric, but not of substance, despite the change of government. Indiahas been able to acquire technologies and systems which would have been difficult from other sources.Given its dependence on Washington for political support, technological assistance and economic largesse,Israel’s ability to pursue any major defence deals with the outside world, including India, depends squarelyon Washington. US have generally approved high-tech military exports from Israel to India, but have beenreluctant to give its nod to systems involving American technology or financial input e.g.the Arrow anti-missile system. With the removal of sanctions on dual use technologies following the Obama visit to Indiathis may not remain a difficulty. As Israeli defence exports to India are being conducted under the watchfuleyes of the United States, the ties between India and Israel will also be constrained by the extent to which theUS wants this engagement to expand. Nevertheless, the acquisition of defence equipment and defencematerial vital for the security of India’s one billion people has set the bench mark for the relationship.

Space CooperationWhile Israel’s space efforts centre on its high-resolution imaging capabilities, India’s space program, which isone of the country's success stories, covers a wide range of activities in launch vehicles, satellites and spaceapplications. India builds a wide variety of remote sensing, meteorological, and communications satellites,which it launches with its own rockets. In September 2007 India launched Israel's TECSAR satellite (IndiaDefence, 17 July 2007) and the two countries are collaborating on India's next generation satellite, RISAT 2(Makor Rishon, 07 April 2009). On 27-28 February 2008 Dr. Abdul Kalam, former President of India, delivereda lecture at the 48th Israel Annual Conference on Aerospace Sciences, and on 20 April 2009 India launched anIsraeli border-control imaging satellite that enables it to monitor its borders with Bangladesh, China, andPakistan (Jane, 29 April 2009).19

Science and TechnologyThe growth of bilateral economic ties between Israel and India includes cooperation in science andtechnology. There is an agreement on science and technology, a science and technology industrial researchfund (amounting to $3 million) and an agreement to facilitate bilateral cooperation and exchanges in thefield of science and technology; an additional Protocol of science and technology cooperation also exists.Between 1995 and 1997 seven Memoranda of Understanding were signed regarding research projects in thefield of advanced materials. Two of these projects were in information technology (IT). As stated above this isa dynamic area of growth where commercialization of the output in the vast Indian market is greatlypossible.

Counter-Terrorism CooperationFighting terrorism is a major issue and challenge for both India and Israel. The two countries set up in 2001a Joint Working Group as part of their Strategic Dialogue which unfortunately has not met regularly. It wasin this context that then Indian National Security Advisor, Brajesh Mishra, argued at a speech to theAmerican Jewish Committee in Washington in May 2003 that democratic nations which face the menace of

19 Israel National Defence College, ibid p58

international terrorism should form a "viable alliance" and develop multilateral mechanisms to counter thismenace. He said that ‘India, the United States and Israel have some fundamental similarities. We are alldemocracies, sharing a common vision of pluralism, tolerance and equal opportunity. Strong India-USrelations and India-Israel relations have a natural logic.’ This was a far cry from the charge of ‘religiousexclusivism’ made by K.M. Panikkar in the 1950s. Predictably, this was interpreted as an India-Israel-UStriangle aimed at Islam and Islamic countries. Such thinking is the obverse side of fundamentalist Islamicliterature put out by the terrorist groups in Kashmir and elsewhere citing US, Israel and India as the threeenemies of the religion.

There is a difference between India and Israel both on the philosophy behind counter-terrorism andrespective threat perceptions. While Israel believes in giving no quarter to terror as an instrument of politicalnegotiation, India has always believed in keeping a door open for dialogue. Israel sees concentric circles ofthreat which includes Iran, Syria, Hezbollah and Hamas, while India sees its threats emanating from radicalIslamic groups sponsored by Pakistan like the Taliban and Lashkar-e-Toiba, Jaish-i-Mohammad who wereresponsible for the Mumbai terror attack. The two do not intersect. Nevertheless, the Joint Working Grouphas been able to exchange practical experiences on border security, suicide terrorism, aviation security,financing of terror, information security, digital and cyber warfare.

Nuclear Policy CoordinationIndia and Israel are nuclear States existing in hostile security environments, which makes the nuclearprogramme strategically important for their national defence and security. Their common interests have notled to any cooperation so far. Israel’s policy not to acknowledge the existence of its nuclear weapons hindersany cooperation between the two countries. Nevertheless there are three possible areas where the twocountries can consult:concern over Pakistan’s nuclear capability; both countries are also concerned about nuclear non-proliferation

in the region;Israel has a vital interest in preventing the transfer of nuclear capability from Pakistan to the Middle East;The India-US Agreement on Civil Nuclear Cooperation is of great interest to Israel as a precedent for its own

efforts vis-a-vis the Nuclear Suppliers Group.

Geo-strategic

IranIndia and Israel do not see eye to eye on the former’s relations with Iran. Aware of India’s close ties with Iran,Israel has repeatedly expressed its concern to India about a possible nuclear technology leak or transfer ofnuclear related information to Iran, a country which Israel regards as a threat to its national security. Israelhas regularly expressed its concern about India's close ties with Tehran. The possibility of India sellingadvanced technology and military equipment to Iran has been brought up at meetings between militaryrepresentatives of the two countries. India–Iran relations are a matter of strategic discord between them.20

The differences of perceptions on Iran between India and Israel are fundamental. Iran enjoys a rarepolitical consensus in India and since the early 1990s every Indian Government has placed a high priority onstrengthening its ties with Tehran. India is unlikely to share Israeli apprehensions over Iranian radicalism. Anumber of factors like India’s need to counter Pakistan’s influence in the Islamic world, the increasing geo-political importance of Central Asia and India’s overland access to Afghanistan, India’s energy needs and thedesire to strengthen economic and commercial ties have led to a growing convergence in India-Iran interestsin the post-cold war period. India has a well-defined position on Iran’s nuclear ambitions: while India wouldnot like to see another nuclear weapon power in the region it has stated that ‘Our approach is quite clear. Wehave said that Iran has the right to peaceful uses of nuclear energy for fulfilling her various obligations andthat the right way to do that is through the IAEA, to assure the world that she is fulfilling her obligations’.21

The Riyadh Declaration of January 2010 during the visit of Prime Minister Manmohan Singh to Saudi Arabia

20 Israel National Defence College,ibid

21 Ministry Of External Affairs, Government of India, April 2008

asked Iran to “remove regional and international doubts about its nuclear weapons programme.”

PakistanUntil 2000, Israel’s single-minded focus on developing, diversifying and strengthening relations with Indiaoutweighed its assessment of Pakistan. From 1992 a mystique was built up by Israel of its ‘specialrelationship’ with India. It included complete support to India’s position that the Kashmir issue should beresolved bilaterally between India and Pakistan on the basis of the Simla Agreement.

Israel has always seen Pakistan as one of the important countries in the Islamic world and seekingregular relations, when possible, has been a goal of its foreign policy. It was only after a level of confidencewas acquired by Israel in its relations with India towards the beginning of this millennium that Israel madedetermined attempts for an opening towards Pakistan. On its part, fallout of 9/11 and the growing USdependence on Pakistan in the global War on Terror was to push Pakistan in moving towards Israel. Since2003, a certain entente cordiale between Israel and Pakistan has emerged.

Yet it is moot whether it still continues given Pakistan’s slide towards radicalism and empowerment ofJihadist elements in the country’s governance.Has then Israel moved away from the paradigm of a ‘specialrelationship’with India?

In justifying the erosion of the so-called special relationship with India, Israel has tended to quote thethaw in India-Pakistan relations. An important consequence of this has been the gradual shift in Israel’spolicy vis-à-vis Kashmir. In the early 1990s, immediately after normalization, Israel maintained Kashmir tobe an integral part of India and that Pakistan would have to vacate from those parts it had occupied in 1947.It is ironic that this position was in direct contrast to Israel’s own policy of continued occupation of Palestine.The extent of the dilution of Israel’s position can be judged from the fact that the Delhi Declaration issued atthe end of Prime Minister Sharon’s visit in 2003 did not carry any reference to the Israeli position onKashmir. India preferred to hold Israel to its earlier position rather than have it diluted in that Declarationwhich Israel had suggested. India has shown a degree of ambivalence towards Israel’s growing ties withPakistan and this issue is no longer taken up in bilateral discussions.

Should Israeli ties with Pakistan attain a strategic dimension they would prove greatly negative toIndia-Israel relations. The same concerns regarding transfer of restricted technology which Israel raisesregarding Iran will apply here.

USAThe rapid growth in India US relations after the visit by President Clinton in 2000 cannot be directly relatedto the improvement of India-Israel relations. Nevertheless, there was a sense that by opening relations withIsrael an important impediment to India-US relations had been removed. In spite of talk of three-way India-US- Israel cooperation, India never considered it a serious strategy. The shared values of adherence todemocracy are nevertheless a binding factor between the three countries. The Indian leadership wasincreasingly convinced that the American Jewish lobby was an excellent model for developing politicalactivism on the part of the Indian-American Diaspora in the US.

The Future: 2012 and beyond

This survey leads us to the conclusion that in the last twenty years India and Israel have got over the politicalhump in their relationship and have found a way to grow them normally like with any other country. Thechange in the special and unique circumstances which circumscribed the relations was largely, though notentirely, due to the phenomenal changes in world political, geo-political and economic configurations.However, complete normalisation of the relationship will depend owing to the proclivity towards caution onthe part of India’s political leadership. For India relations with Israel are now an issue of ‘management’ ofthis mutually beneficial relationship. India has ensured that its growing relations with Israel do not dilute itstraditional support to Palestine.

Yet Israel’s penetration in India has not been without costs:the continuing sentiment in the Arab world that India had abandoned its strong support of the Palestinians

although the latter have themselves remained divided; this has to be seen as a cautionary injunction;There is good evidence that the jihadist groups inimical to India rate India, Israel and US as their enemies.

Mumbai 26/11 demonstrated this mentality by the targeting of the Chabad House, the Jewish place ofworship in Mumbai. Earlier in 1991 there was the kidnapping of an Israeli tourist in Kashmir by a relatedgroup.

The pervasive reports of the use of drugs in selected Indian tourist centres by de-mobilised Israeli soldiers onvacation leading to a string of pleas for clemency to the Indian President.

It is important for both sides to keep in mind that harmonious development of the relationship ispossible only if such negatives are consciously avoided.

Going forward, India-Israel relations are slated to rise to the next level on the basis of the threadsdeveloped in recent years of security cooperation, high technology trade and investment and innovation.Brief comments are offered on each:

Homeland Security and terrorism cooperationThis would cover political, defence and intelligence cooperation for confronting similar problems. TheIndian defence sector has much to learn from the Israeli approach to security which is very rule-based,scientific combining the best of their proprietary technology with rigorous training. This could improveIndian security control systems at all control points like airports, metros and public buildings.

High Technology trade and InvestmentIsrael has a very well funded defence force that in addition to protecting the country has also been at theforefront of developing the country. This is done through active recruitment of the best and the brightestthrough institutions like Talpiot- it places a premium on merit and performance. The work they do indefence laboratories has been responsible for Israel’s success in the telecoms, aeronautics, diagnostics,

information technology etc. The Israeli government has actively encouraged the commercialisation of thetechnologies which have dual use – in defence and industry- by funding these ventures. Collaboration withthe Indian Defence Research and Development Organisation on this basis will be mutually beneficial.

InnovationIndian companies are moving up the value chain from a concentration on innovation based on labour costand productivity arbitrage. On the other hand Israeli innovation is principally focused on higher valuetechnical innovation which is much less reliant on people. Many of the technologies Israel is developing areappropriate for India e.g. agriculture, infrastructure, defence and telecommunications. Given the small sizeof the Israeli market synergy can be developed to create India-Israel joint projects for the Indian market. TheIsraeli ability to aggregate technology for building custom made solutions in areas like homeland security,medicine and pharmaceuticals and other areas are a good fit with the needs of the Indian market and thepossibility to undertake product proving trials.

Oil and GasAside from possible synergy that can be built between India and Israel in renewable energy, there is now achance that the two countries can work together in non-renewable energy- prospection, exploration,production and trading in crude oil and gas. As yet at a very nascent stage the recent discovery of oil and gasdeposits in The Great Levant Basin, an offshore field - estimated to hold a mean of 1.7 billion barrels ofrecoverable oil and a mean of 122 trillion cubic feet of recoverable gas which encompasses the maritime area– encompassing approximately 83,000 square kilometres of the Eastern Mediterranean.22 Israel which isexpecting that 40 percent of the field will be within its exclusive economic zone, has already given an E&Pcontract to a US-owned Israeli firm. India, with the assurance of its growing market for oil and gas and itsexperience in off-shore exploration and prospection is an apt partner for Israel in exploiting the field.

Conclusion

In looking at the answers to the questions we posed at the beginning of this analysis of India’s relations withIsrael it evident that the relationship has been forged in very exceptional circumstances.

Israel’s desire to open relations with India soon after its Independence in 1948 was motivated not onlybecause it was the largest country in Asia but one which had one of the oldest Jewish community in theworld. On the Indian side the question was enmeshed with the reasons which forced the partition of Indiaand the creation of Pakistan. In contra-position Indian political leaders realised early on that if post-partitionIndia had to survive as a single country it would have to be governed through a secular polity which did notgive any preference or concession to the majority community, the Hindus. It would have to accommodate asequal citizens the other faiths particularly the Muslims. At the same time, the majoritarian view within theHindu community represented by the Hindu Mahasabha had to be confronted. Thus in dictating the policyon Israel not only was there a strong influence of the Muslim community but of the views of the Hinducommunity as well. As relations have progressed between the two countries, the likely potential impact onthe 150 million strong Muslim community in India has continued to weigh with the policy makers. Thedifferent views on the preferred polity for India soon after Independence have in later years been reflected inthe view of Israel on the part of the two major national political parties, the Indian National Congress (INC)and the Bharatiya Janata Party (BJP).

India’s secular democratic polity is unique even within other democracies. In eschewing themajoritarian view, India’s effort has been to create a religiously-neutral frame of governance albeit in practicethe cultivation of religious vote banks in the electoral process has somewhat tarnished this achievement.India and Israel are the two long-standing democracies in the Asian region (along with Sri Lanka) and sharemuch in common in the way their systems work despite the difference in their polities.

22 US Geological Survey US Department of the Interior, Fact Sheet 2010-3014 World Petroleum Resources Project, March 2010

While international changes in the early 1990’s were responsible for the movement from non-reciprocal consular relations to full diplomatic relations, it was the INC government under Prime MinisterNarasimha Rao that took the decision. Yet it was when the BJP was in office under Prime Minister AtalBehari Vajpayee that strong foundations were laid for a rapid movement of India-Israel relations. It was inthe nature of the prevailing circumstances that during the first decade the defence relationship became thecatalyst for the building of synergies and diversification into other sectors. By the end of the first decade ofthe 21st century, relations in the defence sector had been irreversibly consolidated and ground had been laidfor upward movement in selected high technology areas in keeping with the innate talents of the twopeoples.

It had also become evident that shorn of the heavy emphasis on the political aspects, the relationshipwill move forward as normally as India’s relations with any other country. From Israel’s perspective,cultivating friendly relations with India is a strategic priority. Geo-politically, Israel finds itself in a hostileneighbourhood; and paradoxically, India has good relations with all of Israel’s neighbours. India’s increasingstrategic weight in international affairs; Israel’s effort to ensure international legitimacy for its statehood;India’s fast growing economy with a huge pool of skilled resources, the potential market for Israeli goodsand services and as a destination for its investments all constitute a solid foundation for the furtherdevelopment of the relationship.

For India, the logic of further developing these relations is incontrovertible: Israel is a source of criticaltechnologies and renowned for its R&D and innovation and more importantly is a part of its extendedneighbourhood in a very turbulent time.

This does not mean that the potential of India’s Muslim community to impact these relations can beminimised, but that the relations have acquired sufficient non-political ballast to ensure that they go forwardin a mutually beneficial way. For India the issue now is not reversing the relationship, but of ‘managing’ it.

Bibliography

1 Rajendra.M.Abhyankar ‘India and West Asia: Defining a Role’, Academic Foundation, New Delhi 2008.Itzak Gerberg, ‘India-Israel Relations:Strategic Interests,Politics and DiplomaticPragmatism’ Israel National Defence College, Tel Aviv, 2010

Israel,Rachanel Rukmini, ‘ The Jews of India:’Their Story’Mosaic Books, New Delhi 2002P.R.Krishnaswamy, ‘India’s Israel Policy’, Columbia University Press/Magnum Books, Delhi 2010Jawaharlal Nehru, ‘Glimpses of World History’ ,Penguin Books, New Delhi 2005T.V.Parasuram, ‘India’s Jewish Heritage’, Sagar Publications, New Delhi 1982K.M. Pannikar, ‘In Two Chinas: Memoires of a Diplomat, George Allen and Unwin, London, 1955Dr. Mahendra Gaur, ed. ‘India-Israel Relations, Responses, Articles, Documents’, FPRC Journal No.5

2011,Foreign Policy Research Centre, New DelhiEugene Rogan, ‘The Arabs’, The Perseus Group, London 2010

Annexe I Indian Ambassadors to Israel

P K Singh 1992 – 1995Shiv Shankar Menon 1995 – 1997Ranjan Mathai 1998 – 2001Ravinder Jassal 2001 – 2004Arun K SinghApril 2005 – 2008Navtej Sarna 2008-

Annexe II Israeli Ambassadors to India

Ephraim Dubek 1992-1995Yehoyada Haim 1995-2000David Afek 2000-2002Dan Stav Dec 2002-Aug 2003Cd’A a.iDavid Danieli 2003-2007Mark Sofer 2007-2011Alon Ushpiz 2011-

Annexe III

India – Israel Bilateral Trade and Economic Relations

Introduction

The bilateral trade between Israel and India has been growing steadily in the past years. If the year 2002 canbe termed as a ‘bounce-back’ year wherein the trade jumped by 43 % to recover from the earlier slumpcaused mainly due to global economic downturn, the years 2003 and 2004 can be described as consolidatingyears as the trade has grown consistently. The growth in the year 2003 reached 25% to touch 1.5 billiondollars mark and for the first nine months of 2004 the growth reached 38% to touch 1.61 $ billion bilateraltrade.

India’s export to Israel in the year 2004 has been $ 1,123 million, in comparison with $ 883 for the year 2003growth of 27%.

The main products exported from India to Israel have been diamond and precious stones (70%), textiles(9%), chemicals and plastic (8%).

Israel’s exports to India in the year 2004 has been $ 1,019 million, in comparison with $ 703 million for in theyear 2003, growth of 45%.

Main exports from Israel to India is diamond and precious stones (67%), machinery and hi tech products(18%) chemicals and agriculture products (11%) and medical equipments (4%).

The broad trade statistics (in million of US $) for the previous years is given below.

Year 2000 2001 2002 2003 2004

India's exports 445 403 633 869 1123

Israel's exports 551 454 601 698 1019

Total Bilateral 996 857 1234 1567 2142

India-Israel Bilateral Trade

( Source: Economic Mission of Israel in India, New Delhi)

Bilateral Trade, Investment and Collaboration

List of Israeli and Indian Companies

AgricultureIsraeli agricultural companies are highly active in India including the following: NaanDanJain, Netafim,

Agrotop, Plasson, Hazera Genetics, Maximilk, Plastro Gvat, Agrexco, Zeraim, ICL fertilizers, Sion,Avshalom Group and more.

For micro-irrigation via drips or sprinklers, India has some 200 micro irrigation companies. The biggest isJain Irrigation (the company purchased 50% stake in Israel’s Naan-Dan Irrigation in 2007). Jain Irrigationis also the world’s second largest irrigation company. Israel-based Netafim has nearly 45% of the worldmarket. Netafim India is the country’s second biggest player, with a 15% market share.

Maxximilk- Maxximilk produces high quality ready-for-transfer pedigree embryos. Maxximilk is in touchwith dairy farms in Andhra Pradesh, Punjab and Kerala. The company estimates that by the end of thisyear it will send its first shipment of embryos to India.

WaterIndia’s companies and official delegations regularly visit the annual event WATEC in Israel which showcasesIsrael’s water and energy technologies. Israeli water companies are active in India including:IDE – the company currently operates 23 desalination plants in India (10 in the State of Gujarat). IDE’s local

partners include Reliance, Essar Construction, and Sanghi industries.Aqwise – the company currently has 3 projects in India including sewage treatment projects in Delhi and

Uttra Pradesh and drinking water treatment project for the city of Agra.Tahal Group – the company is currently highly active in several States including Haryana, Rajasthan, Tamil

Nado, Gujarat, and Uttar Pradesh.Amiad- Amiad provides water filtration systems in over 66 countries around the world and has an office in

Mumbai.Other Israeli water companies which are highly active in India include Bermad, GES, Hakohav Valves, A.R.I.

Flow Control Accessories, Dorot Control Valves and more.

PharmaceuticalsSome of the biggest Israeli pharmaceutical companies have been highly active in India for some years nowincluding Teva and Taro. Representatives of leading Indian pharmaceutical companies e.g. Dr. Reddy’s andCipla) visited recently Israel and attended local exhibitions and conferences.Teva - Teva has Head Office and R&D center in Greater Noida, a Generic R&D and Ratiopharm office in

Mumbai, and three manufacturing plants in Gajraula (API production), Malanpur (API production), andGoa (Ratiopharm production). About 1,000 people work for Teva in India. Teva also sources over US$ 100million annually of pharmaceutical materials from Indian companies such as Dr. Reddy and Cipla.

Taro/Sun Pharma - Taro has signed an Option Agreement with India’s Sun Pharmaceuticals in 2007 and thematter ended in court. The legal dispute came to an end only in September 2010 when the IsraeliSupreme Court made it possible for Sun to acquire a 48% stake in Taro. Recently, Sun increased in stake inTaro to 66%.

BiomedThere is a great scope of cooperation between the two countries in Biomed. Till now such mutual

cooperation is evident mainly in the area of clinical research.Bioline – This company is conducting clinical research in India. It recently announced that it has received

approval from the Indian regulatory authorities to commence the Phase II / III clinical trial of BL-1020 fortreatment of Schizophernia.

Brainsgate – This company also conducts its clinical research in India.

TelecomTower Vision (part of the Fore Group) – The company operates cellular antenna sites in India. Tower Vision

has about 6,000 sites in India, which has a burgeoning mobile telephony market. The company aims tohave 10,000 sites by the end of the year.

Gilat Satelite Networks – For 25 years, Gilat has been at the forefront of VSAT technology and today is aleader in the innovation and development of advanced satellite technologies in multiple disciplines. Thecompany is highly active in India and has an office in Noida.

EnergyFocal Energy – This company is presently developing 30 megawatts biomass power plants in Rajasthan and

a 12 megawatt hydro-electric power plant in Himachal Pradesh, and is involved in numerous otherprojects in various stages. Focal Energy had already committed close to US$ 20 million for directinvestment in India.

Levithan Energy- Leviathan has created wind-, hydro-, and wave-powered products. Leviathan is in touchwith several Indian companies. In 2008, Leviathan Energy and Maple Leaf India PVT have signed a letterof intent for a US$50 million contract to provide clean electricity for India, however the agreement has notbeen implemented yet.

S.D.E. Energy- This company which produces energy from sea waves is in touch with several Indiancompanies. Few years ago, the company has signed an agreement with the Government of Gujarat tobuild a 5 megawatt electric power plant that will be powered exclusively by the power of ocean waves.Till now the agreement was not implemented.

Real EstateEngel Invest - The Engel Invest Group is currently involved in numerous real estate projects in India in

various cities including Mohali (Punjab), Panaji (Goa), Pune (Maharashtra), Jodhpur (Rajasthan),Hyderabad (Andhra Pradesh), and more.

Elbit Imaging – The company invests in India through its subsidiary Plaza Centers. The company is involvedin several projects including the Koregaon Park Plaza in Pune and the Kharadi Hotel and ServicedResidences in Pune.

Levinstein Group – This company and its Indian partner have recently signed an MOU to sell an 85,000square meter office building that they will build in Mumbai for US$ 100 million. The building is locatednear Mumbai International airport.

Big Shopping Malls –This company builds large open-space shopping malls worldwide including the BIGThane-Mumbai Shopping Mall which is located just outside of Mumbai.

Information TechnologySome major Israeli IT companies have been highly active in India for some years now. Some of these

companies established R&D centers in India and / or have subsidiary in the country including thefollowing: Check Point, Amdocs, Magic Software, Ness Technologies, Aladdin, E-Sim, Safend, CelltickSoftware Technologies, Fundtech, Atrica, Niloosoft and more.(iii) Major Investments / Joint Ventures / Bilateral Cooperation from India

India’s Jain Irrigation Systems Ltd acquired 50% of Israel’s NaanDan irrigation in 2007. To date, including theinvestment in the new plant, Jain Irrigation Systems Ltd has invested about NIS 100 million (US$ 27million) in Israel.

India’s Sun Pharma which owns 66% of Israel’s Taro pharmaceuticals plans to invest US$ 100 million over thenext two years to expand and upgrade Taro’s facilities. Sun Pharma's financial report for the first quarterof 2011 highlights Taro's contribution to the company - 17%of its total net profit of 4.43 billion rupees ($98million).

India’s Tejas Networks Ltd acquired the Israeli carrier Ethernet solutions start-up Ethos Networks Ltd (nowcalled Tejas Networks Israel) for an estimated US$ 25 million.

India’s Connectiva Systems Ltd acquired Israeli start-up Olista Ltd for an estimated US$ 20 million. Olistawill become Connectiva’s Israel R&D center and will double its workforce. Olista developed customeranalysis software for mobile operators.

The Mahansaria Family (Yogesh Agencies & Investments Ltd) acquired Israel’s Alliance Tire Company, aleading tires manufacturer on August 13, 2007.

India’s Yes Bank and Israel’s Poalim Capital Markets entered into an alliance for India-Israel Cross-BorderInvestment Banking.

Israel Chemicals Ltd and its Indian joint venture Zuari Rotem Speciality Fertilisers Ltd. are planning to buildtwo more production plants for water soluble complex fertilizers in northern and eastern India.